Polenergia Drops Lithuanian Offshore Wind Project After Economic Viability Analysis

Business & Finance

August 1, 2023, by Adrijana Buljan

Polenergia, the Polish utility company and renewable energy developer, has decided to stop developing an offshore wind project in Lithuania the company was preparing for the country’s next offshore wind auction, which the Lithuanian government plans to hold later this year.

The company says it made the decision after analysing the economic viability of the project in the light of the published parameters regarding the planned auction, including the maximum transaction price announced by the National Energy Regulatory Authority on 13 July.

According to Lithuanian media and the Lithuanian Wind Power Association, the National Energy Regulatory Council (VERT) has set the maximum and minimum prices for the purchase and sale of electricity from renewable energy sources at EUR 107.18/MWh and EUR 64.31/MWh, respectively.

Polenergia says that its decision was also preceded by consultations and was made in agreement with the Lithuanian company Modus Energy which was to act as a local partner in the project.

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The Polish developer and Modus Energy, operating under the Green Genius brand, announced their cooperation in 2022, when the two revealed that, after negotiations that started in 2021, they had agreed on the key terms of an agreement for establishing a joint venture (JV) to develop offshore wind projects in the Lithuanian sector of the Baltic Sea.

Now, following Polenergia’s decision and the consultation between the two partners, the companies agreed to terminate cooperation in this area.

In an investors’ update issued on 28 July, Polenergia noted that, while it is terminating work on preparing this offshore wind project, the company will continue to analyse potential investment and business opportunities on the Lithuanian market.

As reported at the beginning of July, Lithuania just completed its first 700 MW offshore wind tender, with Ocean Winds and its strategic partner, Ignitis Renewables, announced as the provisional winners.

At the end of 2022, the Lithuanian Ministry of Energy brought forward an amendment package to the Laws on Renewable Energy and Electricity which facilitates the country’s second 700 MW tender and accelerated tendering procedures.

It is expected that the second offshore wind farm, planned to be put out to tender this autumn, could produce its first power as early as 2028.